Tackling indirect emissions, the only hope of meeting climate targets

The hope was that this year’s annual UN Climate Conference (COP27) would be accompanied by major global initiatives to tackle climate change. Unfortunately, those present were unable to agree on key milestones, such as agreements on the use of fossil fuels. And as world leaders and influential corporate executives from around the world gathered to discuss climate change, the United Nations sounded the alarm. We are “significantly behind schedule” in meeting climate targets. Limiting global warming to a maximum of 1.5 degrees Celsius, as agreed by nearly 200 countries in the Paris Agreement in 2015, seems further away than ever. As the UN indicates, this entails disastrous consequences. Including a significant rise in sea levels and significant damage to biodiversity.

This year’s climate summit focused on indirect emissions – scope 3 emissions. Because that’s where the problem is. These are the emissions over which a company has no direct influence. 70% of most companies’ carbon footprints fall under scope 3, caused by things like their supply chains, customers, investments, waste, distribution systems, and employees traveling to their workplace. To address these emissions as well, companies in all sectors need to accelerate their emission reduction initiatives. Technology plays a crucial role in this.

Report emissions accurately

Accurately measuring scope 3 emissions is the first step in addressing these emissions. After all, you can only control what you can quantify. However, emissions reporting is not always straightforward. Organizations are often unable to provide accurate scope 3 emissions data. This is because these types of emissions are outside the direct influence of companies and in many cases are caused by a large number of different parties in the supply chain. Mapping this data is therefore often very complicated.

For example, financial institutions, such as banks, often struggle to access accurate and detailed data on their customers’ issues. Because they often don’t get this information directly from their customers, they have to rely on often inconsistent data from third parties. As a result, reported emissions data for the same company can vary widely between financial institutions. As a result, a bank reported a scope 3 emission intensity (the emissions per euro of added value) of more than 7,000 tonnes of CO2 per €1 million turnover for a business customer. While another bank set this figure to zero for the same customer.

Limiting emissions with digital solutions

Large companies are increasingly outsourcing their information management needs to specialized companies. This obviously has many advantages, but it also means that these companies no longer have a direct influence on the emissions associated with it. To be responsible with emissions here too, the companies that outsource data management must choose a supplier with whom they can make progress. Iron Mountain sees this as an opportunity to be part of the solution, helping customers reduce their emissions and environmental impact with innovative technology solutions.

Technological developments make it possible to gain a better insight into indirect emissions, and a growing number of companies in various sectors are increasingly claiming this. Iron Mountain is at the forefront of these innovations. Our company offers a comprehensive range of solutions to help customers understand the environmental performance of their suppliers. For example, with the Asset Lifecycle Management (ALM) Environmental Benefits Report, the Green Shred Report and the Iron Mountain Data Center (IMDC) Green Power Pass, which enables accurate reporting of scope 3 emissions.

Now to net zero?

Organizations across industries and of all sizes are facing increasing pressure from a variety of quarters. Regulators, investors and climate-conscious customers are increasingly demanding more accurate reporting and reductions in indirect emissions. In the EU, the CSRD (Corporate Sustainability Reporting Directive) will come into force from 2024, obliging companies to report extensively on their emissions (including scope 3). The US Securities and Exchange Commission (SEC) also proposed rule changes earlier this year. If implemented, many US companies will be required to regularly present data on their scope 3 emissions

With COP27 behind us, the information management industry must work with every customer to reduce emissions, both direct and indirect. The ‘net-zero’ target of the Paris Agreement for 2050 is fast approaching, and we are already behind schedule. Businesses and governments have a responsibility to realize the transition to a low-carbon economy as quickly as possible. Accurate reporting is the first step in this.

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